AASHISH NIRANJAN SHAH vs. ASSISTANT COMMISSIONER OF INCOME TAX AND ORS

PDF · subscribers
WP/2983/2023HC BombayHCBM01010387202306 March 20242 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the sanction for the order under Section 148A(d) and the notice under Section 148, both dated April 5, 2022, was invalid. This was because the assessment year was 2018-19, and the impugned actions were issued beyond a period of three years. Consequently, the sanctioning authority, as per Section 151(ii) of the Income Tax Act, 1961, ought to have been the Principal Chief Commissioner of Income Tax (PCCIT), not the Principal Commissioner of Income Tax (PCIT). The proviso to Section 151, which was inserted with effect from April 1, 2023, was not applicable to the present case. Following its own precedent in Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors., the Court found the sanction to be invalid. Accordingly, the impugned order and notice were quashed and set aside. All rights and contentions were kept open.

What were the facts?

The petitioner, Aashish Niranjan Shah, filed a writ petition challenging notices and an order related to Assessment Year 2018-19. The challenged actions include a notice dated March 22, 2022, under Section 148A(b) of the Income Tax Act, 1961, an order dated April 5, 2022, under Section 148A(d), and a notice dated April 5, 2022, under Section 148. A key contention was that the sanction for the order under Section 148A(d) and the notice under Section 148 was issued by the Principal Commissioner of Income Tax (PCIT) instead of the Principal Chief Commissioner of Income Tax (PCCIT). The impugned actions were dated April 5, 2022, and thus issued beyond three years from the relevant assessment period, necessitating sanction from the PCCIT as per Section 151(ii) of the Act, as the proviso to Section 151 was not yet applicable.

What were the issues?

1. Whether the sanction accorded by the Principal Commissioner of Income Tax (PCIT) for passing the order under Section 148A(d) and issuing the notice under Section 148 of the Income Tax Act, 1961, is valid, considering the assessment year is 2018-19 and the impugned actions were dated April 5, 2022, thereby falling beyond the three-year period. Assessee's contention: The sanctioning authority should have been the Principal Chief Commissioner of Income Tax (PCCIT) as per Section 151(ii) of the Act, as the actions were taken beyond three years and the proviso to Section 151 was not yet in effect. The sanction by the PCIT is therefore invalid, citing the case of Siemens Financial Services Private Limited Vs. Deputy Commissioner of Income Tax & Ors. Revenue's contention: Counsel for the respondent-revenue agreed with the assessee's submission.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148A(b),Section 148A(d),Section 148,Section 151,Section 151(ii)

AI-generated summary — verify with the full judgment below

1/2 908-wp-2983-23.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 2983 OF 2023 Aashish Niranjan Shah

….Petitioner V/s. Assistant Commissioner of Income Tax & Ors ....Respondents ---- Mr. Mr. Sagar Tilak a/w Ms Payal Rathod i/b Mr. Sachin Hande for Petitioner. Ms Samiksha Kanani for Respondent-Revenue. ---- CORAM : K. R. SHRIRAM & Dr. NEELA GOKHALE, JJ.

DATED : 6th MARCH 2024 P.C. : 1 This petition relates to Assessment Year 2018-19. 2 Commissioner of Income Tax, Circle 5(2)(1), Mumbai & Ors.1 Counsel for respondent agrees. 3 Petitioner is impugning a notice dated 22nd March 2022 issued under Section 148A(b) of the Income Tax Act, 1961 (“the Act”), the order dated 5th April 2022 passed under Section 148A(d) of the Act and the notice also dated 5th April 2022 issued under Section 148 of the Act. One of the grounds raised is that the sanction to pass the order under Section 148A(d)of the Act and issuance of notice under Section 148 of the 1 Writ Petition No.2768 of 2022 dated 6th February 2024 Meera Jadhav MEERA MAHESH JADHAV MEERA MAHESH JADHAV Date: 2024.03.07 18:04:19 +0530

2/2 908-wp-2983-23.doc Act is invalid in as much as the sanction has been admittedly issued by the Principal Commissioner of Income Tax (“PCIT”) and not by the Principal Chief Commissioner of Income Tax (PCCIT”). 4 The impugned order and the impugned notice both dated 5th April 2022, state that the Authority that has accorded the sanction is the PCIT, Mumbai. The matter pertains to Assessment Year (“AY”) 2018-19. Since the impugned order as well as the notice are both issued on 5th April 2022, both have been issued beyond a period of three years; therefore, the sanctioning Income Tax & Ors.2 the sanction is invalid. Ms Kanani agrees. Consequently, the impugned order and impugned notice, both dated 5th April 2022, issued under section 148A(d) and 148, respectively, of the Act are hereby quashed and set aside. 6 Petition disposed. No order as to costs. All rights and contentions are kept open. (Dr. NEELA GOKHALE, J.) (K. R. SHRIRAM, J.) 2 (2023) 457 ITR 647 (Bom) Meera Jadhav

More judgments on Section 148A

All 3,543 judgments and leading authorities on Section 148A →

Recent GST High Court judgments

Search GST case law →